Average US rate on 30-year loan rises to 3.92 pct

[March 16, 2012]  WASHINGTON (AP) -- The average rate in the U.S. on the 30-year fixed mortgage hovered near historic lows this week, making home-buying and refinancing more attractive to those who can qualify.

Mortgage buyer Freddie Mac said Thursday that the U.S. rate on the 30-year loan increased to 3.92 percent. That's up from 3.88 percent the previous week. The rate touched 3.87 percent four weeks ago, the lowest since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage rose to 3.16 percent, up from a record low of 3.13 percent last week.

Rates on the 30-year loan have been below 4 percent for three months. Low rates are among the positive signs emerging that suggest this year could mark a turnaround for the depressed housing market. Still, many people are unable to qualify for the rates.

Builders are more optimistic after seeing more people express interest in buying a home. Construction has picked up and builders are requesting more permits to build single-family homes. And the supply of homes on the market is falling, which could send home prices higher.

A key reason for the optimism is the improving job market. Employers have added an average 244,600 net jobs per month from December through February. That has helped lower the unemployment rate to 8.3 percent, the lowest level in nearly three years.

Frank Nothaft, Freddie Mac's chief economist, said Thursday the positive February jobs report caused yields on U.S. Treasury bonds to increase over the week. Mortgage rates then to track the yield on the 10-year Treasury note.

Even with the improvement, home prices continue to fall. Millions of foreclosures and short sales -- when a lender accepts less than what is owed on a mortgage -- remain on the market. And the housing crisis and recession have also persuaded many Americans to rent instead of buy, which has led to a drop in homeownership.

Economists say housing is years away from returning to full health.

To calculate the average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fees for the 30-year and 15-year fixed loans were 0.8, unchanged from 0.8 last week.

For the five-year adjustable loan, the average rate rose to 2.83 percent from 2.81 percent, and the average fee edged up to 0.8 from 0.7.

The average on the one-year adjustable loan rose to 2.79 percent from 2.73 percent, and the average fee was unchanged at 0.6.

[Associated Press]

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